Markets are trading sharply higher overnight with markets continuing their rally from lows that were posted early in the week as the temperature outlook is hot, bean oil is hitting its highest levels since the fall of 2023, and managed funds appear to have lost their appetite to be as aggressively short as they had been.

Managed funds on Thursday were estimated as net sellers of 5k corn to push the net short out to 189k, net buyers of 5k beans to reduce the net short to 1k, and net sellers of 5k wheat to push the net short out to 65k.

Earlier in the week it was reported the Coke had agreed to switch from HFCS to cane sugar as a sweetener. A lot of changes would need to be made, but if a switch was made it could impact around 40 mbu of US corn demand.

Nearby soy oil prices hit their highest level since October of 2023 overnight and have driven most of the recent gains in beans.

Canada said they were advancing talks with the South American trade bloc Mercosur as they seek ways to diversify trade away from the U.S.

Ukraine estimated total grain harvest so far this year at 7.23 mmt. Total harvest this year is expected to be down 10% from a year ago.

The IGC left their global corn production forecast unchanged at 1.276 bmt (USDA1.264). They estimated the global wheat crop at 808 mmt (USDA 808.6).

December corn traded an inside day on Thursday with the market finishing with losses. Prices gapped higher overnight and are approaching the highest level since 7/7.  There is a gap from 4.30 to 4.37, which is a near-term upside target. Support is now 4.18 and resistance 4.35-37.

Beans posted higher highs, higher lows, and a sharply higher close on Thursday with the market seeing follow-through overnight. The market is getting to be a bit overbought after those gains with prices trading in the gap that was left on 7/7 right now with the top of the gap coming in at 10.49. Support is now 10.30 and resistance 10.50.

Corn is on track to finish the week with large gains after the market posted a bullish key reversal on Monday and has seen good follow-through buying most of the week.  A hotter forecast and reports of pollination problems are contributing to the strength, but the bullish technical reversal is probably the main thing that led managed funds to shift from sellers to buyers. The market is approaching the gap that was left on 7/7 with selling interest expected to pick up as we get above 4.30. Producers can target that area to look at reducing downside risk.

Beans have seen an impressive 3-day rally with the market 40 cents off the lows from early in the week with optimism on trade and a hot forecast providing support.  With that said, most of the gains have come on the back of a higher bean oil market with optimism for US biodiesel demand driving those gains. The global supply outlook for beans is still very comfortable. With the market bumping into trendline resistance from the 6/3 and 7/20 highs, producers should look at option strategies to reduce downside risk.

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Corn up 5-6

Beans up 10-11